Employers who invest in employees' educations may end up profiting, according to a new Lumina Foundation-funded Accenture study.
The report examined the tuition reimbursement program at Cigna and found that for every dollar spent on the program, the company recouped the dollar and saved $1.29 in recruitment and turnover expenses.
Though such programs have been around for decades, they've recently surged in popularity—likely due to high tuition prices, the skills gap, and increased degree requirements.
At Cigna, employees can enroll in any course at any school, but receive discounts at 35 schools that partner with the company. Those partner schools also allow students to pay tuition after they receive their reimbursement from Cigna, supporting employees who can't afford to front the tuition money.
Compared with employees who didn't use tuition reimbursement, Cigna program participants were:
- 10% more likely to earn a promotion;
- 8% more likely to stay at Cigna; and
- 7.5% more likely to transfer within the company.
Additionally, participants earned on average a 43% increase in wages over a three-year period. However, programs vary in scope and outcome.
Graduates might also use their new skills to help their employer directly. For example, a Chick-fil-a franchise owner says one of his employees used tuition assistance to learn about HVAC systems—then applied those skills to maintain the franchise's own systems. Since then, 30 other franchise owners have started their own tuition assistance programs, sending more than 100 employees to college training so far.
More than 60% of employers offer some type of tuition assistance and about one million students currently take some sort of support from their employer. Many of those have exclusive agreements with schools, such as Starbucks and Arizona State University Online (Mulhere, Time, 4/25; Abdul-Alim, Diverse Education, 4/25).
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